Overproduction: A Threat to the Australian Wine Industry
Staff Writer - September 21, 2008
Currently overproduction is the biggest problem facing the Australian wine industry, thus according to the newly-formed Barossa Grape and Wine Association, vintners must stop planting new vines.
"Oversupply remains a very real concern for both grape-growers and winemakers across Australia," said BGWA chief executive Sam Holmes. "Our growers and winemakers in the Barossa are also very conscious of the need to protect the region's outstanding reputation for quality and its role as a major national and international tourist attraction." he said.
Mr. Holmes added that the managed investment schemes (MIS) for the horticultural and agricultural sectors need to be revised. Tax breaks for MIS were very effective in attracting new investors to the wine industry back when more grapes were required by the sector.
However, investors almost tripled in three years, prompting concerns about the impact of their investments on markets which are now oversupplied.
The BWGA pointed out that promoting large-scale vineyard plantings through tax incentives without taking into account demand indicators distorted market forces and turned into a serious threat for the Australian wine industry as a whole.
In addition, too many vineyards put a strain as well on the sustainable allocation of scarce resources, such as water.
The BGWA was set up earlier this year to bring together all Barossa winemakers and grape growers under the umbrella of one organization to promote the region in international markets.
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